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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 29, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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ASPEN TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-2739697
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification number)
TEN CANAL PARK
CAMBRIDGE, MASSACHUSETTS 02141
(617) 577-0100
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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LAWRENCE B. EVANS
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
ASPEN TECHNOLOGY, INC.
Ten Canal Park
Cambridge, Massachusetts 02141
(617) 577-0100
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
STEPHEN J. DOYLE, ESQ. MARK L. JOHNSON, ESQ.
Vice President and General Counsel FOLEY, HOAG & ELIOT LLP
ASPEN TECHNOLOGY, INC. One Post Office Square
Ten Canal Park Boston, Massachusetts 02109
Cambridge, Massachusetts 02141
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] ___
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ____
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
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Common Stock, $.10 par value............. 123,093 shares $75.00 $9,231,975 $2,798
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(1) Estimated solely for the purpose of determining the registration fee. In
accordance with Rule 457(c) under the Securities Act of 1933, the above
calculation is based on the average of the high and low sale prices
reported in the consolidated reporting system of the Nasdaq National Market
on January 25, 1997.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED JANUARY 29, 1997
123,093 SHARES
[LEAF LOGO] ASPEN TECHNOLOGY, INC.
COMMON STOCK
All of the 123,093 shares of Common Stock offered hereby are being sold by
the Selling Stockholders. See "Selling Stockholders." The Company will not
receive any of the proceeds from the sale of shares by the Selling Stockholders.
The Company's Common Stock trades on the Nasdaq National Market under the
symbol "AZPN." On January 28, 1997, the closing sale price of the Common Stock,
as reported by the Nasdaq National Market, was $72.375 per share.
On January 28, 1997, the Company announced that it would effect a
two-for-one stock split of its Common Stock by way of a stock dividend to
persons who are holders of record of Common Stock as of February 14, 1997. The
stock dividend will be distributed on February 28, 1997. The information in this
Prospectus does not give effect to the stock dividend. See "Prospectus
Summary--Recent Events."
The shares of Common Stock offered hereby may be sold from time to time by
the Selling Stockholders, or by pledgees, donees, transferees or other
successors in interest of the Selling Stockholders. Such sales may be made on
the Nasdaq National Market, or otherwise, at prices and on terms then prevailing
or at prices related to the then-current market prices, or in negotiated
transactions at negotiated prices. The shares may be sold by one or a
combination of the following: (a) a block trade in which the broker or dealer so
engaged will attempt to sell the shares as agent, but may position and resell a
portion of the block as principal to facilitate the transaction; (b) purchases
by a broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; and (c) ordinary brokerage transactions and
transactions in which the broker solicits purchasers. Brokers or dealers will
receive commissions or discounts from Selling Stockholders in amounts to be
negotiated immediately prior to the sale. The Selling Stockholders will be
responsible for any discounts, concessions, commissions or other compensation
due to any broker or dealer in connection with the sale of any of the shares
offered hereby. All of the other expenses of this offering (other than legal
fees and expenses incurred by separate counsel for certain of the Selling
Stockholders), estimated at $20,000, will be paid by the Company. See "Plan of
Distribution."
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SEE "RISK FACTORS" COMMENCING ON PAGE 5 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF SHARES OF COMMON STOCK
OFFERED HEREBY.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
, 1997
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports and other information may be
inspected and copies may be obtained (at prescribed rates) at the Commission's
Public Reference Section, 450 Fifth Street, N.W., Room 1024, Washington D.C.
20549, and at the Commission's Regional Offices at Northwestern Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and 7 World
Trade Center, Suite 1300, New York, New York 10048. Reports and other
information concerning the Company also may be inspected at the offices of the
Nasdaq Stock Market, 1735 K Street, N.W., Washington D.C. 20006-1500.
This Prospectus constitutes part of a Registration Statement on Form S-3
(the "Registration Statement") filed by the Company with the Commission under
the Securities Act of 1933, as amended (the "Securities Act"). This Prospectus
does not contain all of the information contained in the Registration Statement,
and reference is hereby made to the Registration Statement and related exhibits
for further information with respect to the Company and the securities offered
hereby. Any statements contained herein concerning the provisions of any
document are not necessarily complete, and, in such instance, reference is made
to the copy of such document filed as an exhibit to the Registration Statement
or otherwise filed with the Commission. Each such statement is qualified in its
entirety by such reference.
INFORMATION INCORPORATED BY REFERENCE
The following documents heretofore filed by the Company with the Commission
pursuant to the Exchange Act are incorporated herein by reference: (1) the
Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1996
(the "Annual Report"); (2) the Company's definitive Proxy Statement dated
November 11, 1996 used in connection with its Annual Meeting of Stockholders
held on December 16, 1996; (3) the Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended September 30, 1996 (the "Quarterly Report"); and (4)
the Company's Current Report on Form 8-K dated January 29, 1997 (the "Current
Report").
All reports and other documents subsequently filed by the Company pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering made hereby shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of the filing of such reports and documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein modifies or supersedes such statement.
Any statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of the Registration Statement or
this Prospectus.
Any person to whom a copy of this Prospectus is delivered may obtain,
without charge, upon written or oral request, a copy of any of the documents
incorporated by reference herein, except for the exhibits to such documents
(other than exhibits expressly incorporated by reference into such documents).
Requests for such documents should be addressed to the Manager of Investor
Relations of the Company, Ten Canal Park, Cambridge, Massachusetts 02141 or
directed to the Manager of Investor Relations at either telephone number (617)
577-0100 or e-mail address invest@aspentech.com.
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements, including the notes thereto, appearing
elsewhere in this Prospectus or incorporated by reference herein. Information
herein does not give effect to the two-for-one stock split of the Company's
Common Stock to be effected by a stock dividend to persons who are holders of
record of Common Stock as of February 14, 1997. See "Recent Events" below.
THE COMPANY
Aspen Technology, Inc. ("AspenTech" or the "Company") is a leading supplier
of off-the-shelf software products and services for the analysis, design and
automation of manufacturing facilities by companies in the process industries,
including the chemicals, petroleum, pharmaceuticals, pulp and paper, electric
power, and food and consumer products industries.
AspenTech provides a sophisticated, integrated family of off-the-shelf
software products for use across the entire process manufacturing life-cycle,
from "off-line" applications used primarily in research and development and
engineering to "on-line" applications used primarily in production. AspenTech's
product offering is classified in four categories: modeling; process information
management ("PIM"); advanced process control ("APC") and optimization; and
planning and scheduling. The Company's off-line modeling software is used by
engineers on desktop computers primarily to simulate and predict manufacturing
processes in connection with the design of new facilities or processes and the
analysis of existing facilities or processes. AspenTech's on-line PIM, APC and
optimization software, which is connected directly to plant instrumentation,
enables the real-time adjustment of production variables in response to
constantly changing operating conditions to improve process efficiency.
AspenTech's PC-based planning and scheduling software is used by companies in
the process industries for economic planning and scheduling for both short-term
and strategic applications, including feedstock selection, product mix
optimization, logistics and supply chain management, scheduling, process unit
optimization, and investment planning. AspenTech couples its off-the-shelf
software products with design and implementation consulting services in order to
market a complete solution to its customers. AspenTech believes its ability to
offer a complete solution of both industry-leading software and sophisticated
process engineering expertise is an important source of competitive
differentiation.
The Company initially became a provider of PIM software and services
through its acquisition of Industrial Systems, Inc. in May 1995. The Company
significantly enhanced its PIM, APC and optimization software service offerings
through its acquisitions of Dynamic Matrix Control Corporation ("DMCC") in
January 1996 and Setpoint, Inc. ("Setpoint") in February 1996. In October 1996
AspenTech acquired all of the outstanding stock of B-JAC International, Inc.
("B-JAC"), a supplier of detailed heat exchanger modeling software, in exchange
for 52,081 shares of the Company's Common Stock, including certain of the shares
being offered hereby. In October 1996 the Company also acquired, in a cash
purchase transaction, all of the assets of the Process Control Division of
Cambridge Control Limited (the "Cambridge Control Division"), which specializes
in APC solutions specifically aimed towards process manufacturing controls
applications for the refining, petrochemical, and pulp and paper industries. In
December 1996 AspenTech acquired the process industries modeling system business
of Bechtel Corporation (the "Bechtel Business"), which provides software
products that are used for planning and scheduling in the process industries and
that are based on linear programming technology. The consideration for the
Bechtel Business consisted of a cash payment to Bechtel Corporation and the
issuance of 77,870 shares of the Company's Common Stock (including certain of
the shares offered hereby) in exchange for all of the outstanding stock of Basil
Joffe Associates, Inc., a related software development organization.
AspenTech's customers span a broad range of process industry segments. With
more than 750 customers worldwide, AspenTech' customers include 44 of the 50
largest chemical companies in the world and 18 of the 20 largest petroleum
refiners in the world.
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The Company was founded in 1981 and is a Massachusetts corporation.
AspenTech's executive offices are located at Ten Canal Park, Cambridge,
Massachusetts 02141, and its telephone number is (617) 577-0100.
RECENT EVENTS
On January 28, 1997, the Company announced financial results for the three
and six months ending December 31, 1996. A copy of the Company's press release
summarizing those financial results is included in the Current Report.
In connection with the announcement of those financial results, the Company
also announced that it would effect a two-for-one stock split of its Common
Stock by way of a stock dividend to persons who are holders of record of Common
Stock as of February 14, 1997. The stock dividend was approved by the board of
directors of the Company on January 27, 1997 and will be payable on February 28,
1997. THE INFORMATION IN THIS PROSPECTUS DOES NOT GIVE EFFECT TO THE STOCK
DIVIDEND.
THE OFFERING
All of the 123,093 shares of Common Stock offered hereby are being sold by
the Selling Stockholders. The offered shares consist of a portion of the shares
of Common Stock issued to the former stockholders of B-JAC, which was acquired
by the Company in October 1996, and to the former stockholder of Basil Joffe
Associates, Inc., which was acquired by the Company in December 1996 as part of
the Bechtel Business. See "Selling Stockholders."
Pursuant to registration rights arrangements entered into with the former
shareholders of B-JAC and Basil Joffe Associates, Inc., the Company is obligated
to keep the Registration Statement in effect for a period of ninety days after
the date on which the Registration Statement is declared effective, or such
shorter period that will terminate when all of the shares offered by such former
shareholders have been sold. The Company may, in its sole discretion, determine
to keep the Registration Statement effective for a longer period of time. See
"Plan of Distribution."
The Company will not receive any of the proceeds from the sale of shares by
the Selling Stockholders. See "Use of Proceeds."
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The Aspen leaf logo is a registered trademark, and "AspenTech" is a
trademark, of the Company.
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RISK FACTORS
THIS PROSPECTUS CONTAINS AND INCORPORATES BY REFERENCE FORWARD-LOOKING
STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933 AND
SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934. THE COMPANY'S ACTUAL RESULTS
COULD DIFFER MATERIALLY FROM THE RESULTS CONTEMPLATED IN THE FORWARD-LOOKING
STATEMENTS AS A RESULT OF A NUMBER OF FACTORS, INCLUDING THE RISK FACTORS SET
FORTH BELOW.
Integration of Acquired Businesses. Since January 1996, the Company has
acquired DMCC, Setpoint, B-JAC, the Cambridge Control Division and the Bechtel
Business. Through these acquisitions, the Company has increased its product and
service offerings to include additional planning and scheduling, PIM, APC and
optimization software and services, and has substantially increased its scope of
operations and number of personnel. The successful and timely integration of
these acquired businesses into the Company is critical to the Company's future
financial performance. This integration will require that the Company, among
other things, integrate the companies' software products and technologies,
retain key employees, assimilate diverse corporate cultures, integrate
management information systems, consolidate the acquired operations and manage
geographically dispersed operations, each of which could pose significant
challenges. The diversion of the attention of management created by the
integration process, and any disruptions or other difficulties encountered in
the transition process, could have a material adverse effect on the business,
operating results and financial condition of the Company. The difficulty of
combining these numerous businesses may be increased by the need to integrate
personnel, and changes effected in the combination may cause key employees to
leave. The long-term success of the acquisitions will require the further
development of the PIM, APC and optimization software and services markets,
which currently are immature. There can be no assurance that the Company will be
able to integrate and develop the operations of the acquired businesses
successfully, and any failure to do so could have a material adverse effect on
the Company's business, operating results and financial condition.
A substantial majority of the revenues of each of DMCC, Setpoint and the
Cambridge Control Division has been generated by service engagements.
AspenTech's revenues historically have been derived principally from the
licensing of software products, and its management has limited experience in
managing a service business. In particular, a significant portion of the service
engagements of these businesses has been undertaken on a fixed-price basis. The
Company bears the risk of cost overruns and inflation in connection with
fixed-price engagements, and as a result any of these engagements may be
unprofitable. While the Company believes that its reserves for fixed-price
contracts are reasonable, there can be no assurance that the Company's reserves
will be sufficient to cover future losses that might be incurred with respect to
any fixed-price contracts. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Results of Operations" in the
Annual Report and the Quarterly Report.
Dependence Upon Increased Market Penetration. Increased use in the process
industries, particularly the chemicals and petroleum industries, of software and
services for the analysis, design and automation of process manufacturing plants
in general and of the Company's software products and services in particular is
critical to the Company's future growth. The Company believes that a number of
factors will determine its ability to achieve increased market penetration.
These factors include product performance, accuracy of results, ease of
implementation and use, breadth and integration of product offerings,
reliability and scope of applications. Failure of the Company to achieve
increased market penetration in the process industries would substantially
restrict the future growth of the Company and could have a material adverse
effect on the Company's business, operating results and financial condition. See
"Business--The AspenTech Advantage" and "--Strategy" in the Annual Report.
Fluctuations in Quarterly Operating Results. The Company's operating
results have fluctuated in the past and may fluctuate significantly in the
future as a result of a variety of factors, including purchasing patterns,
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timing of new products and enhancements by the Company and its competitors, and
fluctuating foreign economic conditions. In addition, the Company ships software
products within a short period after receipt of an order and typically does not
have a material backlog of unfilled orders of software products. Therefore,
revenues from software licenses in any quarter are substantially dependent on
orders booked in that quarter. Historically, a majority of each quarter's
revenues from software licenses has come from license contracts that have been
effected in the final weeks of that quarter. The revenues for a quarter
typically include a number of large orders. If the timing of any of these orders
is delayed, it could result in a substantial reduction in revenues for that
quarter. Since the Company's expense levels are based in part on its
expectations as to future revenues, the Company may be unable to adjust spending
in a timely manner to compensate for any revenue shortfall and any revenue
shortfalls would likely have a disproportionate adverse effect on net income.
Prior to fiscal 1996, the Company experienced a net loss for the first quarter
of each fiscal year, in part because a substantial portion of the Company's
revenues is derived from countries other than the United States where business
is slow during the summer months and also in part because of the timing of
renewals of software licenses. The Company expects that these factors will
continue to affect its operating results and that the Company may experience net
losses in the initial quarter of future fiscal years. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Quarterly Results" in the Annual Report.
Concentration of Revenues in the Chemicals and Petroleum Industries. The
Company derives a significant portion of its revenues from companies in the
chemicals and petroleum industries. Accordingly, the Company's future success is
dependent upon the continued demand for modeling software by companies in the
chemicals industry, for planning and scheduling software in the petroleum
industry, and for PIM, APC and optimization software and services by companies
in the chemical and petroleum industries. The chemical and petroleum industries
are highly cyclical. The Company believes that economic downturns in the United
States, Europe, Japan, Asia and South America and pricing pressures experienced
by chemical and petroleum companies in connection with cost-containment measures
have led to delays and reductions in certain capital and operating expenditures
by many of such companies worldwide. The Company's revenues have in the past
been, and may in the future be, subject to substantial period-to-period
fluctuations as a consequence of such industry patterns, as well as general
domestic and foreign economic conditions and other factors affecting spending by
companies in the Company's target process industries. There can be no assurance
that such factors will not have a material adverse effect on the Company's
business, operating results and financial condition. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Results of Operations" in the Annual Report and the Quarterly
Report.
Product Development and Technological Change. The market for software and
services for the analysis, design and automation of process manufacturing plants
is characterized by continual change and improvement in computer hardware and
software technology. The Company's future success will depend on its ability to
enhance its current software products and services, to introduce new software
products and services that keep pace with technological developments, and to
continue to address the changing needs of its customers. There can be no
assurance that the Company will be successful in developing and marketing new
and enhanced products and services, or that its products and services will
continue to address adequately the needs of the marketplace. Like many other
software products, the Company's products have on occasion contained undetected
errors or "bugs." In addition, because new releases of the Company's products
are initially installed only by a small number of customers, any errors or
"bugs" in those new releases may not be detected for a number of months after
the delivery of the software. If the Company's products do not perform
substantially as expected or are not accepted in the marketplace, the Company's
business, operating results and financial condition would be materially
adversely affected. See "Business--Product Development" in the Annual Report.
Dependence on Key Personnel. The Company's future success depends to a
significant extent on Lawrence B. Evans, the Company's chief executive officer,
its other executive officers, and certain key technical, managerial and
marketing personnel. The loss of the services of any of these individuals or
groups
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of individuals could have a material adverse effect on the Company's business,
operating results and financial condition. None of the Company's executive
officers has entered into an employment agreement with the Company, and the
Company does not have, and is not contemplating securing, any significant amount
of key- man life insurance on any of its executive officers or other key
employees. The Company believes that its future success also will depend
significantly upon its ability to attract, motivate and retain additional highly
skilled technical, managerial and marketing personnel. Competition for such
personnel is intense, and there can be no assurance that the Company will be
successful in attracting and retaining the personnel it requires to continue to
grow and operate profitably. See "Business--Employees" in the Annual Report.
Product Liability. The sale and implementation of on-line applications by
the Company may entail the risk of product liability claims. The Company's APC
and optimization software products and services are used in the design,
operation and management of manufacturing processes at large facilities, and any
failure by the software at those facilities could result in significant claims
for damages or for violations of environmental, safety and other laws and
regulations. The Company's agreements with its customers generally contain
provisions designed to limit the Company's exposure to potential product
liability claims. It is possible, however, that the limitation of liability
provisions contained in the Company's license agreements may not be effective as
a result of federal, state or local laws or ordinances or unfavorable judicial
decisions. A successful product liability claim against the Company could have a
material adverse effect upon the Company's business, operating results and
financial condition.
Migration to Microsoft Windows. AspenTech believes that operating systems
similar to Microsoft Windows, due to their interoperability and customization
capabilities, are increasingly the preferred choice of certain of its customers.
AspenTech is currently developing native Windows 95 and Windows NT versions of
its software products. The Company is aware of two competitors that are
marketing modeling and simulation software for use with existing Microsoft
Windows operating systems, both of which are currently shipping a release of
modeling and simulation software for Windows operating systems. There can be no
assurance that the Company will be successful in developing versions of any or
all of its software products that will operate on Windows 95 or Windows NT, or
that any such development, even if successful, will be completed concurrent with
or prior to introductions by competitors of software products on Windows 95,
Windows NT or any other Microsoft Window system. Any such failure or delay could
affect the Company's competitive position or lead to product obsolescence in the
future. See "Business--Product Development" and "Competition" in the Annual
Report.
Dependence on Proprietary Technology. The Company regards its software as
proprietary and relies on a combination of copyright, patent, trademark and
trade secret laws, license and confidentiality agreements, and software security
measures to protect its proprietary rights. AspenTech has received a United
States patent for the expert guidance system in its proprietary graphical user
interface. The Company has registered or applied to register certain of its
significant trademarks in the United States. The Company generally enters into
non-disclosure agreements with its employees and customers, and historically has
restricted access to its software products' source codes, which it regards as
proprietary information. In a few cases, the Company has provided copies of the
source code for certain products to customers solely for the purpose of special
customization of the products and has deposited copies of the source code for
certain products in third-party escrow accounts as security for on-going service
and license obligations. In these cases, the Company relies on nondisclosure and
other contractual provisions to protect its proprietary rights.
The laws of certain countries in which the Company's products are
distributed do not protect the Company's products and intellectual property
rights to the same extent as the laws of the United States. The laws of many
countries in which the Company licenses its products protect trademarks solely
on the basis of registration. The Company currently possesses a limited number
of trademark registrations in certain foreign jurisdictions and does not possess
any foreign copyright or patent registrations. The Company derived more than 50%
of its revenues in each of fiscal 1994 and fiscal 1995, approximately 45% of its
revenues in fiscal
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1996 and approximately 57% of its revenues in the first six months of fiscal
1997 from customers outside the United States.
There can be no assurance that the steps taken by the Company to protect
its proprietary rights will be adequate to deter misappropriation of its
technology or independent development by others of technologies that are
substantially equivalent or superior to the Company's technology. Any such
misappropriation of the Company's technology or development of competitive
technologies could have a material adverse effect on the business, results of
operations and financial condition of the Company. The Company could incur
substantial costs in protecting and enforcing its intellectual property rights.
Moreover, from time to time third parties may assert patent, trademark,
copyright and other intellectual property rights to technologies that are
important to the Company. In such an event, the Company may be required to incur
significant costs in litigating a resolution to the asserted claims. There can
be no assurance that such a resolution would not require that the Company pay
damages or obtain a license of a third party's proprietary rights in order to
continue licensing its products as currently offered or, if such a license is
required, that it will be available on terms acceptable to the Company. See
"Business--Proprietary Rights."
Competition. The Company's software products compete with software tools
that are internally developed by companies in the process industries and with
certain process modeling, PIM, APC and optimization software products that are
sold by a number of commercial suppliers. AspenTech's primary commercial
competitors in the process modeling software market are Simulation Sciences
Inc., Hyprotech, Ltd. and Chemstations, Inc. In the planning and scheduling
market, AspenTech primarily competes with Bonner & Moore Associates, Inc.,
Haverly Systems, Inc., Chesapeake Decision Sciences, Inc., and Ernst & Young
Wright Killen. In the PIM market, AspenTech primarily competes with Oil Systems
Inc. and Biles and Associates and, to a lesser extent, with digital control
system vendors such as Honeywell Inc. In the APC and optimization markets,
AspenTech competes with the Profimatics and Icotron divisions of Honeywell Inc.,
which primarily sell digital control system hardware, as well as with the Simcon
division of ABB Asea Brown Boveri (Holding) Ltd. Several smaller competitors,
including the Litwin Engineering division of Raytheon Company and Treiber
Control, focus exclusively on the APC market. Emergence of a new competitor or
the consolidation of existing competitors could adversely affect the Company's
business, operating results and financial condition. Certain competitors also
supply related hardware products to existing and potential customers of
AspenTech, and may have established relationships that afford the competitors an
advantage in supplying software and services to those customers. The Company's
continued success depends on its ability to compete effectively with its
commercial competitors and to persuade prospective customers to use the
Company's products and services instead of, or in addition to, software
developed internally or services provided by their own personnel. In light of
these factors, there is no assurance that the Company will be able to maintain
its competitive position. See "Business--Competition" in the Annual Report.
Management of Growth. Since fiscal 1990, the Company has experienced
substantial growth in the number of its employees, the scope of its operating
and financial systems, and the geographic area of its operations. The Company's
operations have expanded significantly through both internally generated growth
and acquisitions, particularly the acquisitions of DMCC and Setpoint in the
third quarter of fiscal 1996. This growth has resulted in an increase in the
level of responsibility for management personnel. To manage its growth
effectively, the Company must continue to implement and improve its operating
and financial systems, and to retain and increase its employee base. There can
be no assurance that the management systems currently in place will be adequate
or that the Company will be able to manage the Company's recent or future growth
successfully, and any failure to do so could have a material adverse effect on
the Company's business, operating results and financial condition. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Results of Operations" in the Annual Report and the Quarterly
Report.
International Operations. The Company derived more than 50% of its revenues
in each of fiscal 1994 and fiscal 1995, approximately 45% of its revenues in
fiscal 1996 and approximately 57% of its revenues in the first six months of
fiscal 1997 from customers outside the United States. The Company anticipates
that
8
10
revenues from customers outside the United States will continue to account for a
significant portion of its total revenues in the foreseeable future. AspenTech's
customers outside the United States historically have been located principally
in Europe and Japan, while Setpoint historically has derived a substantial
portion of its revenues from customers in Asia and South America. The Company's
operations outside the United States are subject to certain risks, including
unexpected changes in regulatory requirements, exchange rates, tariffs and other
barriers, political and economic instability, difficulties in managing
distributors or representatives, difficulties in staffing and managing foreign
subsidiary operations, difficulties or delays in translating products and
product documentation into foreign languages, and potentially adverse tax
consequences. There can be no assurance that any of these factors will not have
a material adverse effect on the Company's business, operating results and
financial condition.
The impact of future exchange rate fluctuations on the Company's financial
condition and results of operations cannot be accurately predicted. In recent
years, the Company has increased the extent to which it denominates arrangements
with customers outside the United States in the currencies of the country in
which the software or services are provided. From time to time the Company has
engaged in, and may continue to engage in, hedges of a significant portion of
installment contracts denominated in foreign currencies. There can be no
assurance that any hedging policies implemented by the Company will be
successful or that the cost of such hedging techniques will not have a
significant impact on the Company's business, results of operations or financial
condition. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the Annual Report and the Quarterly Report.
Risks Associated With Future Acquisitions. To expand its markets, the
Company's business strategy includes growth through additional acquisitions.
Identifying and pursuing acquisition opportunities and integrating acquired
products and businesses requires a significant amount of management time and
skill. There can be no assurance that the Company will be able to identify
suitable acquisition candidates, consummate any acquisition on acceptable terms
or successfully integrate any acquired business into the Company's operations.
There also can be no assurance that any future acquisition will not have an
adverse effect upon the Company's operating results, particularly in the fiscal
quarters immediately following consummation of the acquisition while the
acquired business is being integrated into the Company's operations. As a result
of acquisitions, the Company may encounter unexpected liabilities and
contingencies associated with the acquired businesses. The Company may use
Common Stock or Preferred Stock or may incur additional long-term indebtedness
or a combination thereof for all or a portion of the consideration to be paid in
future acquisitions. The issuance of Common Stock or Preferred Stock in
acquisitions could result in dilution to existing stockholders, while the use of
cash reserves or significant debt financing to fund acquisitions could reduce
the Company's liquidity.
Potential Volatility of Stock Price. The stock market has from time to time
experienced extreme price and volume fluctuations, particularly in the high
technology sector, and those fluctuations have often been unrelated to the
operating performance of particular companies. In addition, factors such as
announcements of technological innovations or new products by the Company or its
competitors, as well as market conditions in the computer software or hardware
industries, may have a significant impact on the market price of the Company's
Common Stock.
Effect of Certain Charter and By-Law Provisions and Anti-Takeover
Provisions; Possible Issuances of Preferred Stock. The Company's Restated
Articles of Organization, its By-Laws and certain Massachusetts laws contain
provisions that may discourage acquisition bids for the Company and that may
reduce the temporary fluctuations in the trading price of the Company's Common
Stock which are caused by accumulations of stock, thereby depriving stockholders
of certain opportunities to sell their stock at temporarily higher prices or
receive a premium for their shares as part of an acquisition of the Company.
Preferred Stock may be issued by the Company in the future without stockholder
approval and upon such terms as the Board of Director may determine. The rights
of the holders of Common Stock will be subject to, and may be adversely affected
by, the rights of the holders of any Preferred Stock that may be issued in
9
11
the future. The issuance of Preferred Stock, while providing desirable
flexibility in connection with possible acquisitions and other corporate
purposes, could have the effect of making it more difficult for a third party to
acquire, or of discouraging a third party from acquiring, a majority of the
outstanding stock of the Company. The Company has no present plans to issue any
shares of Preferred Stock.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common Stock by
the Selling Stockholders, nor will any such proceeds be available for use by the
Company or otherwise for the Company's benefit. See "Selling Stockholders."
SELLING STOCKHOLDERS
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock by each of the Selling
Stockholders as of January 28, 1997 and as adjusted to reflect the sale of the
shares of Common Stock offered hereby for all Selling Stockholders. The
following information does not give effect to the stock dividend described in
"Prospectus Summary--Recent Events," above.
Shares to be
Shares Beneficially Owned
Beneficially Owned After Offering if
Prior to Offering(1) Number of All Shares Sold(1)
------------------- Shares Being ------------------
Name Number Percent Offered Number Percent
- ---- ------ ------- ------------ ------ -------
B-JAC International, Inc.
Employees Stock
Ownership Plan(2).... 15,624 * 14,062 1,562 *
Basil Joffe(3)............ 77,870 * 76,220 1,650 *
Beatrice R. Noe(4)........ 19,098 * 17,188 1,910 *
Bruce J. Noe(5)........... 17,359 * 15,623 1,736 *
John W. Noe(6)............ 19,098 * 17,188 1,910 *
- ----------------
* Percentage of shares beneficially owned is less than 1.0%.
(1) Unless otherwise noted, each person identified possesses sole voting and
investment power with respect to shares subject to community property laws
where applicable.
(2) Mary A. Palermo, the Senior Vice President, Finance and Chief Financial
Officer of the Company, is the trustee of the B-JAC International, Inc.
Employee Stock Ownership Plan.
(3) Mr. Joffe was the President and sole director of Basil Joffe Associates,
Inc. until its acquisition by the Company in December 1996.
(4) Includes 19,098 shares held by John Noe (of which 8,594 shares are being
offered hereby), the spouse of Ms. Noe. Ms. Noe was the Secretary and a
director of B-JAC until its acquisition by the Company in October 1996.
(5) Mr. Noe was the Vice President and a director of B-JAC until its
acquisition by the Company in October 1996.
(6) Includes 19,098 shares held by Beatrice Noe (of which 8,594 shares are
being offered hereby), the spouse of Mr. Noe. Mr. Noe was the President
and a director of B-JAC until its acquisition by the Company in
October 1996.
10
12
PLAN OF DISTRIBUTION
This Prospectus and the Registration Statement are in furtherance of a
"shelf" registration pursuant to Rule 415 promulgated by the Commission under
the Securities Act. Pursuant to registration rights arrangements entered into
with the former shareholders of B-JAC and Basil Joffe Associates, Inc., the
Company is obligated to keep the "shelf" registration effective for a period of
ninety days after the date on which the Registration Statement is declared
effective by the Commission, or such shorter period that will terminate when all
of the shares offered by such former shareholders have been sold. The Company
may, in its sole discretion, determine to keep the Registration Statement
effective for a longer period of time.
The shares offered hereby may be sold from time to time by the Selling
Stockholders, or by pledgees, donees, transferees or other successors in
interest of the Selling Stockholders. Such sales may be made on the Nasdaq
National Market, or otherwise, at prices and on terms then prevailing or at
prices related to the then-current market prices, or in negotiated transactions
at negotiated prices. The shares may be sold by one or a combination of the
following: (a) a block trade in which the broker or dealer so engaged will
attempt to sell the shares as agent, but may position and resell a portion of
the block as principal to facilitate the transaction; (b) purchases by a broker
or dealer as principal and resale by such broker or dealer for its account
pursuant to this Prospectus; and (c) ordinary brokerage transactions and
transactions in which the broker solicits purchasers. In effecting sales,
brokers or dealers engaged by the Selling Stockholders may arrange for other
brokers or dealers to participate. Brokers or dealers will receive commissions
or discounts from Selling Stockholders in amounts to be negotiated immediately
prior to the sale. The Selling Stockholders and any broker-dealers that
participate in the distribution may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act, and any commission received by
them and any profit on the resale of shares sold by them may be deemed to be
underwriting discounts and commissions.
Upon the Company being notified by a Selling Stockholder that any material
arrangement has been entered into with a broker-dealer for the sale of shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, a supplemented prospectus will
be filed, if required, pursuant to Rule 424(c) under the Securities Act, setting
forth (i) the name of such Selling Stockholder and the name of each of the
participating broker-dealers, (ii) the number of shares involved, (iii) the
price at which such shares were sold, (iv) the commissions paid or discounts or
concessions allowed to such broker-dealers, where applicable, (v) a statement to
the effect that such broker-dealers did not conduct any investigation to verify
the information set out or incorporated by reference in this Prospectus and (vi)
other facts material to the transaction.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Foley, Hoag & Eliot LLP, Boston, Massachusetts.
EXPERTS
The consolidated balance sheets of the Company and its subsidiaries as of
June 30, 1995 and 1996 and the related consolidated statements of operations,
stockholders' equity and cash flows for the years ended June 30, 1994, 1995 and
1996 incorporated by reference herein have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are incorporated by reference herein in reliance upon the authority
of said firm as experts in giving said reports.
11
13
================================================================================
No broker, dealer or any other person has been authorized to give any
information or to make any representations in connection with this offering
other than those contained in this Prospectus, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company or any Selling Stockholder. This Prospectus does not constitute
an offer to sell or a solicitation of an offer to buy any securities other than
the shares of Common Stock to which it relates or an offer to, or a solicitation
of, any person in any jurisdiction where such an offer or solicitation would be
unlawful. Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that there has been no
change in the affairs of the Company since the date hereof or that information
contained herein is correct as of any time subsequent to its date.
=================
TABLE OF CONTENTS
=================
Available Information....................... 2
Information Incorporated by Reference....... 2
Prospectus Summary.......................... 3
Risk Factors................................ 5
Use of Proceeds............................. 10
Selling Stockholders........................ 10
Plan of Distribution........................ 11
Legal Matters............................... 11
Experts..................................... 11
================================================================================
123,093 SHARES
[LEAF LOGO]
ASPEN TECHNOLOGY, INC.
COMMON STOCK
----------
PROSPECTUS
----------
,1997
================================================================================
14
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses to be paid by the
Registrant and the Selling Stockholders in connection with the issuance and
distribution of the shares of Common Stock being registered. All amounts shown
are estimates except for the Securities and Exchange Commission registration fee
and the Nasdaq National Market listing fee. The Registrant will pay all expenses
in connection with the distribution of the shares of Common Stock being sold by
the Selling Stockholders (including fees and expenses of counsel for the
Company), except for any discounts, concessions, commissions or other
compensation due to any broker or dealer in connection with the sale of any of
the shares offered hereby and for legal fees and expenses incurred by separate
counsel for certain of the Selling Stockholders in connection with the offering
made hereby.
Payable by
Payable by Certain Selling
Company Stockholders
------- ------------
Securities and Exchange Commission registration fee... $ 2,798 $ --
Nasdaq National Market listing fee.................... 2,462 --
Legal fees and expenses............................... 10,000 750
Blue sky fees and expenses, including legal fees...... 750 --
Printing, EDGAR formatting and mailing expenses....... 2,500 --
Miscellaneous......................................... 1,490 --
-------- -----
Total............................................ $20,000 $ 750
======= =====
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article 6 of the Company's Restated Articles of Organization provides that
the Company shall indemnify each person who is or was a director, officer,
employee or other agent of the Company, and each person who is or was serving at
the request of the Company as a director, trustee, officer, employee or other
agent of another organization in which it directly or indirectly owns shares or
of which it is directly or indirectly a creditor, against all liabilities, costs
and expenses reasonably incurred by any such persons in connection with the
defense or disposition of or otherwise in connection with or resulting from any
action, suit, or other proceeding in which they may be involved by reason of
being or having been such a director, officer, employee agent or trustee, or by
reason of any action taken or not taken in such capacity, except with respect to
any matter as to which such person shall have been finally adjudicated by a
court of competent jurisdiction not to have acted in good faith in the
reasonable belief that his or her action was in the best interests of the
Company. The provisions of the Company's Articles pertaining to indemnification
may not be amended and no provision inconsistent therewith may be adopted
without the approval of either the Board of Directors or the holders of at least
a majority of the voting power of the Company. Section 67 of Chapter 156B of the
Massachusetts Business Corporation Law authorizes a corporation to indemnify its
directors, officers, employees and other agents unless such person shall have
been adjudicated in any proceeding not to have acted in good faith in the
reasonable belief that such action was in the best interests of the corporation.
The registration rights agreement between the Company and the Selling
Stockholders who were formerly B-JAC stockholders contains provisions pursuant
to which such Selling Stockholders have agreed to indemnify directors and
officers of the Registrant against certain liabilities, including liabilities
under the Securities Act. Reference is made to the form of such registration
rights agreement filed as Exhibit 99.1 hereto.
The Company maintains a directors' and officers' insurance policy that
covers certain liabilities of directors and officers of the Company, including
liabilities under the Securities Act. The Company maintains a general liability
insurance policy that covers certain liabilities of directors and officers of
the Company arising out of claims based on acts or omissions in their capacities
as directors or officers.
II-1
15
ITEM 16. EXHIBITS
EXHIBIT NO.
-----------
5.1 Opinion of Foley, Hoag & Eliot LLP
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Foley, Hoag & Eliot LLP (included in Exhibit 5.1)
24.1 Powers of Attorney (included on pages II-4 and II-5)
99.1 Registration Rights Agreement dated as of October 1, 1996 among Aspen
Technology, Inc., former stockholders of B-JAC International, Inc. and
certain successors-in-interest thereto and assigns thereof
99.2 Section 2.7 (Registration of Exchanged Shares) of Reorganization Agreement
dated as of December 23, 1996 between Dr. Basil Joffe, Basil Joffe
Associates, Inc. and Aspen Technology, Inc.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement;
(i) To include any prospectus required to Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, Form S-8, and
the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports
filed by the Registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial BONA FIDE offering
thereof.
(3) To remove from registration, by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference to the Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial BONA FIDE offering thereof.
II-2
16
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid
by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
II-3
17
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cambridge, Commonwealth of Massachusetts, on
January 27, 1997.
ASPEN TECHNOLOGY, INC.
By: /S/ LAWRENCE B. EVANS
------------------------
Lawrence B. Evans
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned officers and directors of Aspen Technology, Inc.,
hereby severally constitute and appoint Lawrence B. Evans, Mary A. Palermo and
Stephen J. Doyle, and each of them singly, our true and lawful attorneys with
full power to them, and each of them singly, to sign for us and in our names in
the capacities indicated below, the Registration Statement on Form S-3 filed
herewith and any and all pre-effective and post-effective amendments to said
Registration Statement, and any subsequent Registration Statement for the same
offering which may be filed under Rule 462(b) under the Securities Act of 1933
and generally to do all such things in our names and on our behalf in our
capacities as officers and directors to enable Aspen Technology, Inc. to comply
with the provisions of the Securities Act of 1933 and all requirements of the
Securities and Exchange Commission, hereby ratifying and confirming our
signatures as they may be signed by our said attorneys, or any of them, to said
Registration Statement and any and all amendments thereto or to any subsequent
Registration Statement for the same offering which may be filed under said Rule
462(b).
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and as of the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/S/ LAWRENCE B. EVANS Chairman of the Board January 27, 1997
- -------------------------- and Chief Executive Officer
LAWRENCE B. EVANS (Principal Executive Officer)
/S/ MARY A. PALERMO Executive Vice President, January 27, 1997
- -------------------------- Finance and Chief Financial
MARY A. PALERMO Officer (Principal Financial
and Accounting Officer)
/S/ JOSEPH F. BOSTON Director January 27, 1997
- --------------------------
JOSEPH F. BOSTON
/S/ GRESHAM T. BREBACH, JR Director January 27, 1997
- --------------------------
GRESHAM T. BREBACH, JR.
/S/ DOUGLAS R. BROWN Director January 27, 1997
- --------------------------
DOUGLAS R. BROWN
II-4
18
/S/ JOAN C. MCARDLE
. . . . . . . . . . . . . . . . . . Director January 27, 1997
JOAN C. MCARDLE
/S/ ALISON ROSS
. . . . . . . . . . . . . . . . . . Director January 27, 1997
ALISON ROSS
II-5
1
Exhibit 5.1
FOLEY, HOAG & ELIOT LLP
One Post Office Square
Boston, Massachusetts 02109-2170
Telephone: (617) 832-1000
Facsimile: (617) 832-7000
Telex 940693
http://www.fhe.com
January 29, 1997
ASPEN TECHNOLOGY, INC.
Ten Canal Park
Cambridge, Massachusetts 02141
Ladies and Gentlemen:
We have acted as special counsel for Aspen Technology, Inc., a
Massachusetts corporation (the "Company"), in connection with the preparation
and filing with the Securities and Exchange Commission under the Securities Act
of 1933, as amended), of a Registration Statement on Form S-3 (the "Registration
Statement") relating to the offering of up to 123,093 shares (the "Shares") of
the Company's common stock, $.01 par value ("Common Stock"), by certain
stockholders of the Company.
In arriving at the opinion expressed below, we have examined and relied on
the following documents:
(i) the Registration Statement;
(ii) the Articles of Organization of the Company, as amended, as certified
by the Secretary of State of The Commonwealth of Massachusetts on
January 28, 1997;
(iii) the By-Laws of the Company, as amended as of the date hereof; and
(iv) copies of a written consent of the Board of Directors of the Company
adopted on September 26, 1996 and a draft of minutes of a meeting of
the Board of Directors of the Company held on November 26, 1996.
In addition, we have examined and relied on the originals or copies certified or
otherwise identified to our satisfaction of all such other records, documents
and instruments of the Company and such other persons, and we have made such
investigations of law, as we have deemed appropriate as a basis for the opinions
expressed below. We have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity to
the original documents of all documents submitted to us as certified or
photostatic copies.
We express no opinion other than as to the laws of The Commonwealth of
Massachusetts.
2
ASPEN TECHNOLOGY, INC.
January 29, 1997
Page Two
Based upon the foregoing, we are of the opinion that the Shares have been
duly authorized and validly issued and are fully paid and non-assessable.
We consent to the filing of this opinion as Exhibit 5.1 to the Registration
Statement and to the reference to us under the heading "Legal Matters" in the
prospectus forming a part of the Registration Statement.
Very truly yours,
FOLEY, HOAG & ELIOT LLP
By /s/ MARK L. JOHNSON
-------------------
A Partner
1
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement on Form S-3 of our report included
in the Annual Report on Form 10-K of Aspen Technology, Inc. for the fiscal year
ended June 30, 1996 and to the reference to our firm in this Registration
Statement.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
January 24, 1997
1
Exhibit 99.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT dated as of October 1, 1996 (this
"Agreement") is entered into among Aspen Technology, Inc., a Massachusetts
corporation ("Aspen"), and Beatrice R. Noe, Bruce J. Noe, John W. Noe and B-JAC
International, Inc. Employees Stock Ownership Plan (collectively the "Initial
Holders"), and any of their respective (a) successors-in-interest, (b) family
members, trusts wholly or principally for the benefit of family members and
affiliates to whom an Initial Holder or its successor-in-interest transfers any
of the Registrable Securities (as defined in Section 1) initially issued to such
Initial Holder and (c) any other person or persons to whom an Initial Holder
transfers all or substantially all of the Registrable Securities initially
issued to such Initial Holder (including any participants of B-JAC
International, Inc. Employees Stock Ownership Plan to whom Registrable
Securities are distributed under such Plan), which family member, trust,
affiliate or person described in clause (b) or (c) is registered on the books of
Aspen (together with the Initial Holders, such successors-in-interest, family
members, trusts, affiliates and other persons are hereinafter sometimes referred
to as the "Holders").
This Agreement is made pursuant to the Agreement and Plan of Reorganization
dated as of September 25, 1996 (the "Reorganization Agreement") among Aspen,
Aspen Acquisition Corp. II, B-JAC International, Inc. ("B-JAC") and the Initial
Holders, pursuant to which, among other things, (a) Aspen Acquisition Corp. II
is merging with and into B-JAC (the "Merger"), with B-JAC being the surviving
corporation and thereby becoming a wholly owned subsidiary of Aspen and (b)
Aspen is issuing shares (the "Shares") of its common stock, $.10 par value
("Aspen Common"), to the Initial Holders, which will not be registered under the
Securities Act of 1933, as amended (the "Securities Act"). In order to induce
B-JAC to enter into the Reorganization Agreement and the Initial Holders to vote
in favor of the Merger, Aspen has agreed to provide certain registration rights
with respect to the Shares as set forth in this Agreement.
NOW, THEREFORE, Aspen and the Initial Holders hereby agree as follows:
1. SECURITIES SUBJECT TO THIS AGREEMENT. The securities entitled to the
benefits of this Agreement are the Shares and any other securities issued by
Aspen in exchange for any of the Shares (collectively the "Registrable
Securities") but, with respect to any particular Registrable Security, only so
long as it continues to be a Registrable Security. Registrable Securities shall
include any securities issued as a dividend or distribution on account of
Registrable Securities or resulting from a subdivision of the outstanding shares
of Registrable Securities into a greater number of shares (by reclassification,
stock split or otherwise). For the purposes of this Agreement, a security that
was at one time a Registrable Security shall cease to be a Registrable Security
when (a) such security has been effectively registered under the Securities Act
and has been disposed of pursuant to such registration statement, (b) such
security is or can be distributed to the public pursuant to Rule 144 (or any
similar provision then in force) under the Securities Act, (c) such security has
been otherwise transferred and (i) Aspen has delivered a new certificate or
other evidence of ownership not bearing the legend set forth on the Shares upon
the initial issuance thereof (or other legend of similar import) and (ii) in the
opinion of counsel to Aspen, the subsequent disposition of such security shall
not require the registration or qualification under the Securities Act or (d)
such security has ceased to be outstanding.
2. SHELF REGISTRATION. Aspen agrees that it shall cause to be filed a
registration statement (the "Shelf Registration") on Form S-3 or any other
appropriate form under the Securities Act for an offering
2
to be made on a delayed or continuous basis pursuant to Rule 415 thereunder or
any similar rule that may be adopted by the Securities and Exchange Commission
(the "Commission") and permitting sales in ordinary course brokerage or dealer
transactions not involving an underwritten public offering (and shall register
or qualify the shares to be sold in such offering under such other securities or
"blue sky" laws as would be required pursuant to clause (A) of Section 5 hereof)
covering the entire issue of Registrable Securities (other than Registrable
Securities held in escrow pursuant to the Escrow Agreement dated the date
hereof) and such other shares of Aspen Common as may be included pursuant to
registration rights of other holders of Aspen Common. Prior to the filing of the
Shelf Registration or any supplement or amendment thereto, Aspen will furnish
copies of the Shelf Registration or such amendment to one counsel designated by
the Holders of a majority of the Registrable Shares, and will not file the Shelf
Registration or such amendment without the prior consent of such counsel, which
consent shall not be unreasonably withheld. Aspen shall use its best efforts to
(a) cause the Shelf Registration to be declared effective by the Commission on,
or as soon as practicable after, the date on which Aspen first publishes
financial results covering at least thirty days of post-acquisition combined
operations of Aspen and B-JAC as the surviving company and (b) keep the Shelf
Registration continuously effective (and register or qualify the shares to be
sold in such offering under such other securities or "blue sky" laws as would be
required pursuant to clause (A) of Section 5 hereof) for a period (the "Shelf
Registration Period") of ninety days after the date on which the Shelf
Registration is declared effective by the Commission (or such shorter period
that will terminate when all Registrable Securities covered by the Shelf
Registration have been sold). Aspen agrees, if necessary, to supplement or make
amendments to the Shelf Registration, if required by the registration form used
by Aspen for the Shelf Registration or by the instructions applicable to such
registration form or by the Securities Act or the rules or regulations
thereunder or as may reasonably be requested by the Holders of a majority of the
Registrable Securities then outstanding.
3. PIGGYBACK REGISTRATION. At any time prior to the second anniversary of
the date hereof, whenever Aspen proposes to file a registration statement under
the Securities Act with respect to an underwritten public offering of Aspen
Common for cash sale by Aspen for its own account or by any of Aspen's
securityholders, Aspen shall give written notice (the "Offering Notice") of such
proposed filing to each of the Holders at least thirty days before the
anticipated filing date. Such Offering Notice shall offer all such Holders the
opportunity to register such number of Registrable Securities as each such
Holder may request in writing, which request for registration (each, a
"Piggyback Registration") must be received by Aspen within fifteen days after
the Offering Notice is given. Aspen shall use all reasonable efforts to cause
the managing underwriter or underwriters of a proposed underwritten offering to
permit the holders of the Registrable Securities requested to be included in the
registration for such offering to include such Registrable Securities in such
offering on the same terms and conditions as the shares of Aspen Common included
therein. Notwithstanding the foregoing, if the managing underwriter or
underwriters of a proposed underwritten offering advise Aspen in writing that in
its or their opinion the number of Registrable Securities proposed to be sold in
such offering exceeds the number of Registrable Securities that can be sold in
such offering without adversely affecting the market for Aspen Common, Aspen
will include in such registration the number of Registrable Securities that in
the opinion of such managing underwriter or underwriters can be sold without
adversely affecting the market for Aspen Common. In such event, the number of
Registrable Securities, if any, to be offered for the accounts of Holders shall
be reduced PRO RATA on the basis of the relative number of any Registrable
Securities requested by each such Holder to be included in such registration to
the extent necessary to reduce the total number of Registrable Securities to be
included in such offering to the number recommended by such managing underwriter
or underwriters.
4. HOLDBACK AGREEMENTS.
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4.1. RESTRICTIONS ON PUBLIC SALE BY HOLDERS OF REGISTRABLE SECURITIES. Each
Holder agrees, if reasonably requested by the managing underwriter or
underwriters for any underwritten offering covered by any Piggyback Registration
(whether or not such Holder is participating therein), not to effect any public
sale or distribution of Registrable Securities, including a sale pursuant to
Rule 144 (or any similar provision then in force) under the Securities Act,
during the 30 days prior to, and during the 180-day period beginning on, the
effective date of such Piggyback Registration (except as part of such
underwritten offering).
4.2. RESTRICTIONS ON PUBLIC SALE BY ASPEN. Aspen agrees (a) not to effect
any public sale or distribution of any of its securities similar to those being
registered, or any securities convertible into or exchangeable or exercisable
for such securities (except pursuant to registrations on Form S-4 or S-8 or any
successor or similar forms thereto) during the thirty-day period beginning on
the effective date of the Shelf Registration and (b) to give each Holder written
notice of the effectiveness of the Shelf Registration as soon as practicable
following, but in any event within two business days following, the effective
date.
5. REGISTRATION PROCEDURES. Whenever the Holders have requested that any
Registrable Securities be registered pursuant to Section 2 or 3 hereof, Aspen
shall use its best efforts to effect the registration of Registrable
Securities in accordance with the intended method of disposition thereof as
expeditiously as practicable and, in connection with any such request, Aspen
shall as expeditiously as possible:
(a) furnish to each seller of Registrable Securities such number of copies
of the registration statement, each amendment and supplement thereto
(in each case including all exhibits thereto), the prospectus included
in such registration statement (including each preliminary prospectus)
and such other documents as each seller may reasonably request in
order to facilitate the disposition of the Registrable Securities
owned by such seller;
(b) use reasonable efforts to cause the Registrable Securities covered by
such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary by
virtue of the business and operations of Aspen to enable the seller or
sellers thereof or the underwriters, if any, to consummate the
disposition of such Registrable Securities;
(c) notify each seller of such Registrable Securities at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and prepare and file with the Commission a supplement or
amendment to such prospectus so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading, PROVIDED that prior to the filing of such
supplement or amendment, Aspen will furnish copies thereof to the
Holders, any underwriters and counsel for the Holders and will not
file such supplement or amendment without the prior consent of such
counsel, which consent shall not be unreasonably withheld;
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(d) notify the Holder (i) when a registration statement has become
effective and when any post-effective amendments and supplements
thereto become effective, (ii) of any request by the SEC or any state
securities authority for amendments and supplements to a registration
statement and prospectus or for additional information after the
registration statement has become effective, (iii) of the issuance by
the SEC or any state securities authority of any stop order suspending
the effectiveness of a registration statement or the initiation of any
proceedings for that purpose, (iv) if between the effective date of a
registration statement and the closing of any sale of Registrable
Securities covered thereby Aspen receives any notification with
respect to the suspension of the qualification of the Registrable
Securities for sale in any jurisdiction or the initiation of any
proceeding for such purpose and (v) of the happening of any event
during the period a registration statement is effective which makes
any statement made in such registration statement or the related
prospectus untrue in any material respect or which requires the making
of any changes in such registration statement or prospectus in order
to make the statements therein not misleading;
(e) use its best efforts to obtain the withdrawal of any order suspending
the effectiveness of a registration statement;
(f) make available for inspection by any seller of Registrable Securities,
any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent
retained by any such seller or underwriter (collectively, the
"Inspectors"), all financial and other records, pertinent corporate
documents and properties of Aspen (collectively, the "Records") as
shall be reasonably necessary to enable them to exercise their due
diligence responsibility, and cause Aspen's officers, directors,
employees and agents to supply all information reasonably requested by
any such Inspector in connection with such registration statement.
Records that Aspen determines, in good faith, to be confidential and
that it notifies the Inspectors are confidential shall not be
disclosed by the Inspectors unless (i) the disclosure of such Records
is, in the reasonable judgment of any Inspector, necessary to avoid or
correct a misstatement or omission of a material fact in the
registration statement or (ii) the release of such Records is ordered
pursuant to a subpoena or other order from a court or governmental
agency of competent jurisdiction or required (in the written opinion
of counsel to such seller or underwriter, which counsel shall be
reasonably acceptable to Aspen) pursuant to applicable state or
federal law. Each seller of Registrable Securities agrees that it
will, upon learning that disclosure of such Records are sought by a
court or governmental agency, give notice to Aspen and allow Aspen, at
Aspen's expense, to undertake appropriate action to prevent disclosure
of the Records deemed confidential;
(g) otherwise use reasonable efforts to comply with all applicable rules
and regulations of the Commission, and make generally available to its
security holders, as soon as reasonably practicable, an earnings
statement covering a period of twelve months, beginning within three
months after the effective date of the registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of
the Securities Act; and
(h) use reasonable efforts to cause all Registrable Securities covered by
the registration statement to be listed on each securities exchange or
market, if any, on which similar
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securities issued by Aspen are then listed, PROVIDED that the
applicable listing requirements are satisfied.
Whenever the Holders have requested that any Registrable Securities be
registered pursuant to Section 3 hereof, Aspen shall also:
(A) use reasonable efforts to register or qualify such Registrable
Securities under such other securities or "blue sky" laws of such
jurisdictions as any seller or underwriter reasonably requests in
writing and to do any and all other acts and things that may be
reasonably necessary or advisable to register or qualify for sale
in such jurisdictions the Registrable Securities owned by such
seller; PROVIDED, HOWEVER, that Aspen shall not be required to
(i) qualify generally to do business in any jurisdiction where it
is not then so qualified, (ii) subject itself to taxation in any
such jurisdiction, (iii) consent to general service of process in
any such jurisdiction or (iv) provide any undertaking required by
such other securities or "blue sky" laws or make any change in
its charter or by-laws that the Board of Directors of Aspen
determines in good faith to be contrary to the best interest of
Aspen and its stockholders;
(B) enter into customary agreements (including an underwriting
agreement in customary form, if the offering is an underwritten
offering) and take such other actions as are reasonably required
in order to expedite or facilitate the disposition of such
Registrable Securities; and
(C) if such sale is pursuant to an underwritten offering, use
reasonable efforts to obtain a "cold comfort" letter and updates
thereof from Aspen's independent public accountants in customary
form and covering such matters of the type customarily covered by
"cold comfort" letters as the managing underwriter or
underwriters reasonably request.
Aspen may require each seller or prospective seller of Registrable
Securities as to which any registration is being effected to furnish to Aspen
such information regarding the distribution of such securities and other matters
as may be required to be included in the registration statement.
Each Holder agrees that, upon receipt of any notice from Aspen of the
happening of any event of the kind described in Section 5(c), such Holder shall
forthwith discontinue disposition of Registrable Securities pursuant to the
registration statement covering such Registrable Securities until such Holder's
receipt of the copies of the supplemented or amended prospectus contemplated by
Section 5(c) and, if so directed by Aspen, such Holder shall deliver to Aspen
(at Aspen's expense) all copies, other than permanent file copies then in such
Holder's possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice. If Aspen shall give any such
notice, Aspen shall extend the period during which such registration statement
shall be maintained effective pursuant to this Agreement by the number of days
during the period from and including the date of the giving of such notice
pursuant to Section 5(c) to and including the date when each seller of
Registrable Securities covered by such registration statement shall have
received the copies of the supplemented or amended prospectus contemplated by
Section 5(c). Notwithstanding anything to the contrary set forth above in this
paragraph, Aspen agrees that it may not require the Holders of Registrable
Securities to discontinue disposition of Registrable Securities for purposes
of effecting a public offering of any securities of Aspen by any of its
security holders (other than an offering made pursuant to a registration on
Form S-8).
Notwithstanding the foregoing, but subject to Section 4.2(a), if Aspen
shall furnish to the Holders a certificate signed by the Chief Financial
Officer of Aspen stating that (i) in the good faith judgment of
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the Board of Directors of Aspen it would be significantly disadvantageous to
Aspen and its stockholders for any such registration statement to be amended or
supplemented because Aspen would be required to disclose in such registration
statement, either directly or through incorporation by reference, non-public
information that it would not otherwise be obligated to disclose at such time
and (ii) the need for such an amendment or supplement is not caused by a
proposed secondary public offering of securities of Aspen by any of its
securityholders (other than an offering made pursuant to a registration on Form
S-8), Aspen may defer such amending or supplementing of such registration
statement for not more than 45 days and in such event the Holders shall be
required to discontinue disposition of any Registrable Securities covered by
such registration statement during such period. Notwithstanding the foregoing,
in connection with any amendment or supplement required to reflect a public
offering of securities by Aspen, Aspen shall file such amendment or supplement
no later than the same day that it files a registration statement relating to
such offering and shall provide written notice of the filing of such amendment
or supplement to the Holders of Registrable Securities promptly following such
filing. If Aspen shall deliver any certificate pursuant to the second preceding
sentence in connection with the Shelf Registration pursuant to Section 2, Aspen
shall extend the period during which the Shelf Registration shall be maintained
effective pursuant to this Agreement by the number of days during the period
from and including the date of the delivery of such certificate to and including
the date when each Holder of Registrable Securities covered by the Shelf
Registration shall have received written notice that dispositions can be resumed
under the Shelf Registration.
6. EXPENSES. Aspen shall pay all expenses incident to its performance of or
compliance with this Agreement, regardless of whether such registration becomes
effective, including (a) all Commission, stock exchange or market registration
and filing fees, (b) all fees and expenses incurred in complying with securities
or "blue sky" laws (including reasonable fees and disbursements of counsel in
connection with "blue sky" qualifications of the Registrable Securities), (c)
all printing, messenger and delivery expenses, (d) all fees and disbursements of
Aspen's independent public accountants and counsel and (e) all fees and expenses
of any special experts retained by Aspen in connection with any registration
pursuant to the terms of this Agreement; PROVIDED, HOWEVER, that the Holders
shall be liable for (i) any fees or commissions of brokers, dealers or
underwriters, (ii) any transfer taxes and (iii) any fees or expenses of
consultants, financial advisors, counsel and other professionals acting on
behalf of the Holders in connection with any registration pursuant to the terms
of this Agreement.
7. INDEMNIFICATION; CONTRIBUTION.
7.1. INDEMNIFICATION BY ASPEN. Aspen agrees to indemnify, to the
fullest extent permitted by law, each Holder and each person, if any, who
controls such Holder (within the meaning of the Securities Act), against
any and all losses, claims, damages, liabilities and expenses caused by any
untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein (in the case of a prospectus, in light of
the circumstances under which they were made) not misleading, except
insofar as the same are caused by or contained in any information with
respect to such Holder furnished in writing to Aspen by such Holder
expressly for use therein or by such Holder's failure to deliver a copy of
the prospectus or any supplements thereto after Aspen has furnished such
Holder with a sufficient number of copies of the same or by the delivery of
prospectuses by such Holder after Aspen notified such Holder in writing to
discontinue delivery of prospectuses. Aspen also shall indemnify any
underwriters of the Registrable Securities, their officers and directors
and each person who controls such underwriters (within the meaning of the
Securities Act) to the same extent as provided above with respect to the
indemnification of the Holders.
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7.2. INDEMNIFICATION BY HOLDERS. In connection with any registration
statement in which a Holder is participating, each such Holder shall
furnish to Aspen in writing such information and affidavits with respect to
such Holder as Aspen reasonably requests for use in connection with any
such registration statement or prospectus and agrees to indemnify,
severally and not jointly, to the fullest extent permitted by law, Aspen,
its officers, directors and agents and each person, if any, who controls
Aspen (within the meaning of the Securities Act) against any and all
losses, claims, damages, liabilities and expenses resulting from any untrue
or alleged untrue statement of a material fact or any omission or alleged
omission of a material fact required to be stated in any registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or necessary to make the statements therein (in the case
of a prospectus, in light of the circumstances under which they were made)
not misleading, to the extent, but only to the extent, that such untrue or
alleged untrue statement or omission is contained in or improperly omitted
from, as the case may be, any information or affidavit with respect to such
Holder so furnished in writing by such Holder. Each Holder also shall
indemnify any underwriters of the Registrable Securities, their officers
and directors and each person who controls such underwriters (within the
meaning of the Securities Act) to the same extent as provided above with
respect to the indemnification of Aspen.
7.3. CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any party that proposes
to assert the right to be indemnified under this Section 7 shall, promptly
after receipt of notice of commencement of any action against such
party in respect of which a claim is to be made against an indemnifying
party or parties under this Section 7, notify each such indemnifying party
of the commencement of such action, enclosing a copy of all papers served,
but the omission so to notify such indemnifying party will not relieve it
from any liability that it may have to any indemnified party under the
foregoing provisions of this Section 7 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses
by the indemnifying party. If any such action is brought against any
indemnified party and it notifies the indemnifying party of its
commencement, the indemnifying party will be entitled to participate in
and, to the extent that it elects by delivering written notice to the
indemnifying party promptly after receiving notice of the commencement
of the action from the indemnified party, jointly with any other
indemnifying party similarly notified, to assume the defense of the action,
with counsel reasonably satisfactory to the indemnified party, and after
notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be liable
to the indemnified party for any legal or other expenses except as
provided below and except for the reasonable costs of investigation
subsequently incurred by the indemnified party in connection with the
defense. If the indemnifying party assumes the defense,the indemnifying
party shall have the right to settle such action without the consent of
the indemnified party; PROVIDED, HOWEVER, that the indemnifying party
shall be required to obtain such consent (which consent shall not be
unreasonably withheld) if the settlement includes any admission of
wrongdoing on the part of the indemnified party or any decree or
restriction on the indemnified party or its officers or directors;
PROVIDED, FURTHER, that no indemnifying party, in the defense of any such
action, shall, except with the consent of the indemnified party
(which consent shall not be unreasonably withheld), consent to entry of
any judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff to
such indemnified party of a release from all liability with respect
to such action. The indemnified party will have the right to employ its own
counsel in any such action, but the fees, expenses and other charges of
such counsel will be at the expense of such indemnified party unless
(a) the employment of counsel by the indemnified party has been authorized
in writing by the indemnifying party, (b) the indemnified party has
reasonably concluded (based on advice of counsel) that there may be legal
defenses available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party, (c) a
conflict or potential conflict exists (based on advice of
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counsel to the indemnified party) between the indemnified party and the
indemnifying party (in which case the indemnifying party will not have the
right to direct the defense of such action on behalf of the indemnified
party) or (d) the indemnifying party has not in fact employed counsel to
assume the defense of such action within a reasonable time after receiving
notice of the commencement of the action, in each of which cases the
reasonable fees, disbursements and other charges of counsel will be at the
expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding
or related proceedings in the same jurisdiction, be liable for the
reasonable fees, disbursements and other charges of more than one separate
firm admitted to practice in such jurisdiction at any one time from all
such indemnified party or parties unless (x) the employment of more than
one counsel has been authorized in writing by the indemnifying party or
parties, (y) an indemnified party has reasonably concluded (based on
advice of counsel) that there may be legal defenses available to it that
are different from or in addition to those available to the other
indemnified parties or (z) a conflict or potential conflict exists (based
on advice of counsel to an indemnified party) between such indemnified
party and the other indemnified parties, in each of which cases the
indemnifying party shall be obligated to pay the reasonable fees and
expenses of such additional counsel or counsels. An indemnifying party
will not be liable for any settlement of any action or claim effected
without its written consent (which consent shall not be unreasonably
withheld).
7.4. CONTRIBUTION. If the indemnification provided for in this
Section 7 from the indemnifying party is unavailable to an indemnified
party hereunder in respect of any losses, claims, damages, liabilities or
expenses referred to herein, then the indemnifying party, to the extent
such indemnification is unavailable, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities
or expenses in such proportion as is appropriate to reflect the relative
fault of the indemnifying party and indemnified parties in connection with
the actions that resulted in such losses, claims, damages, liabilities or
expenses. The relative fault of such indemnifying party and indemnified
parties shall be determined by reference to, among other things, whether
any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material
fact, has been made by, or relates to information supplied by, such
indemnifying party or indemnified parties, and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party as a result of
the losses, claims, damages, liabilities and expenses referred to above
shall be deemed to include, subject to the limitations set forth in
Section 7.3 hereof, any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7.4 were determined by PRO RATA allocation
or by any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall by entitled to contribution from any person.
If indemnification is available under this Section 7, the indemnifying
parties shall indemnify each indemnified party to the full extent provided in
Sections 7.1 and 7.2 hereof without regard to the relative fault of said
indemnifying parties or indemnified party.
8. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No person may participate
in any underwritten registration hereunder unless such person (a) agrees to sell
such person's securities on the basis provided in any underwriting agreements
approved by the persons entitled hereunder to approve such arrangements
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and (b) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents reasonably required
under the terms of such underwriting arrangements.
9. RULE 144. Aspen covenants that it shall use its best efforts to file the
reports required to be filed by it under the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder if and when
Aspen becomes obligated to file such reports, and it shall, if feasible, take
such further action as any Holder may reasonably request, all to the extent
required from time to time to enable such Holder to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by (a) Rule 144 under the Securities Act, as such Rule may
be amended from time to time or (b) any similar rules or regulations hereafter
adopted by the Commission. Upon the written request of any Holder, Aspen shall
deliver to such Holder a written statement as to whether it has complied with
such requirements.
In addition, if any of the Registrable Securities have not been registered
within three years of the Closing Date (as defined in the Reorganization
Agreement), Aspen will, upon request of a Holder, use its best efforts (subject
to applicable law) to arrange for the exchange of the certificates representing
the then-outstanding Registrable Securities of such Holder for certificates
omitting the legend specified in Section 3.2.5 of the Reorganization Agreement;
PROVIDED, HOWEVER, that such Holder has not violated any provision of Rule 145
which would preclude such exchange.
10. MISCELLANEOUS.
10.1. REMEDIES. Each Holder, in addition to being entitled to exercise
all rights granted by law, including recovery of damages, will be entitled
to specific performance of its rights under this Agreement. Aspen agrees
that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Agreement
and hereby agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.
10.2. AMENDMENTS AND WAIVERS. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless Aspen has obtained the written consent of the Holders that
own, in the aggregate, at least a majority of the Registrable Securities
then outstanding.
10.3. NOTICES. Any notice, request, instruction or other document to
be given hereunder by any party to the other shall be in writing and
delivered personally or sent by certified mail, postage prepaid, by
facsimile (with receipt confirmed), or by courier service, as follows:
To Aspen: Aspen Technology, Inc.
Ten Canal Park
Cambridge, Massachusetts 02141
Fax: (617) 577-0722
Attention: Chief Financial Officer
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With a copy to:
Foley, Hoag & Eliot LLP
One Post Office Square
Boston, Massachusetts 02109
Fax: (617) 832-7000
Attention: Mark L. Johnson, Esq.
To any Holder: John W. Noe
3706 Commodore Point Court
Midlothian, Virginia 23112
With a copy to:
Kaufman & Canoles
One Commercial Place
Norfolk, Virginia 23514
Fax: (804) 624-3169
Attention: Richard C. Mapp, III
or to such other persons as may be designated in writing by the parties, by
a notice given as aforesaid.
10.4. CONSTRUCTION. The headings in this Agreement are included only
for convenience and shall not affect the meaning or interpretation of this
Agreement. The words "herein" and "hereof" and other words of similar
import refer to this Agreement as a whole and not to any particular part of
this Agreement. The word "including" as used herein shall not be construed
so as to exclude any other thing not referred to or described.
10.5. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the Holders and the successors and assigns
of Aspen.
10.6. ENTIRE AGREEMENT, ASSIGNABILITY, ETC. This Agreement (1)
constitutes the entire agreement, and supersedes all other prior agreements
and understandings, both written and oral, between the parties with respect
to the subject matter hereof, (2) is not intended to confer upon any Person
other than the parties hereto any rights or remedies hereunder, except as
otherwise expressly provided herein, and (3) shall not be assignable by
operation of law or otherwise except to each Stockholder's heirs upon such
Stockholder's death. No provisions of this Agreement are intended, nor will
be interpreted, to provide or create any third party beneficiary rights or
any other rights of any kind in any client, customer, affiliate,
stockholder, partner or employee of any party hereto or any other Person
unless specifically provided otherwise herein, and, except as so provided,
all provisions hereof will be personal solely between the parties to this
Agreement.
10.7. VALIDITY. The invalidity or unenforceability of any provisions
of this Agreement shall not affect the validity or enforceability of any
other provisions of this Agreement, each of which shall remain in full
force and effect.
10.8. GOVERNING LAW AND JURISDICTION. This Agreement shall be governed
by the laws of The Commonwealth of Massachusetts. Aspen hereby consents to
personal jurisdiction in the U.S. District Court for the Eastern District
sitting in Richmond, Virginia, with respect to claims arising under this
Agreement.
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10.9. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
* * *
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
ASPEN TECHNOLOGY, INC.
By: /s/ LAWRENCE B. EVANS
------------------------------------------------
Lawrence B. Evans, President
INITIAL HOLDERS
/s/ BEATRICE R. NOE
---------------------------------------------------
Beatrice R. Noe
/s/ BRUCE J. NOE
---------------------------------------------------
Bruce J. Noe
/s/ JOHN W. NOE
---------------------------------------------------
John W. Noe
B-JAC International, Inc. Employees Stock Ownership
Plan (formerly B-JAC Computer Services, Inc.
Employees Stock Ownership Plan)
/s/ JOHN W. NOE
---------------------------------------------------
Trustee
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Exhibit 99.2
[Excerpted from Reorganization Agreement dated as of December 23, 1996
between Dr. Basil Joffe, Basil Joffe Associates, Inc. and
Aspen Technology, Inc.]
2.7. REGISTRATION OF EXCHANGED SHARES. Aspen agrees that, at its cost
and expense and as soon as reasonably practicable given Aspen's planned
registration of other securities and announcement of the transaction
contemplated in this Agreement, it shall cause to be filed a registration
statement (the "Shelf Registration") on Form S-3 or any other appropriate form
under the Securities Act for an offering to be made on a delayed or continuous
basis pursuant to Rule 415 thereunder or any similar rule that may be adopted by
the Securities and Exchange Commission (the "Commission") and permitting sales
in ordinary course brokerage or dealer transactions not involving an
underwritten public offering (and shall register or qualify the shares to be
sold in such offering under such other securities or "blue sky" laws as would
reasonably be required) covering the entire issue of Exchanged Shares and such
other shares of Aspen Common as may be included pursuant to registration rights
of other holders of Aspen Common. Aspen shall use its best efforts to keep the
Shelf Registration continuously effective (and register or qualify the shares to
be sold in such offering under such other securities or "blue sky" laws as would
be required for a period (the "Shelf Registration Period") of ninety days after
the date on which the Shelf Registration is declared effective by the Commission
(or such shorter period that will terminate when all Exchanged Shares covered by
the Shelf Registration have been sold). Aspen agrees, if necessary, to
supplement or make amendments to the Shelf Registration, if required by the
registration form used by Aspen for the Shelf Registration or by the
instructions applicable to such registration form or by the Securities Act or
the rules or regulations thereunder. After expiration of the [initial] Shelf
Registration Period and for a period of two years from the Closing Date, Aspen
shall, upon the written request of the Stockholder, file one or more Shelf
Registrations permitting sales of any remaining Exchanged Shares, provided
however that Aspen shall not be required to file more than one such Shelf
Registration per year. Notwithstanding the foregoing, if Aspen shall furnish to
the Stockholder a certificate signed by the Chief Financial Officer of Aspen
stating that in the good faith judgment of the Board of Directors of Aspen it
would be significantly disadvantageous to Aspen and its stockholders for the
Shelf Registration to be amended or supplemented because Aspen would be required
to disclose in the Shelf Registration, either directly or through incorporation
by reference, non-public information that it would not otherwise be obligated to
disclose at such time Aspen may defer such amending or supplementing of the
Shelf Registration for not more than 45 days and in such event the Stockholder
shall be required to discontinue disposition of any [securities] covered by the
Shelf Registration during such period.
[For purposes of the foregoing Section 2.7, the following terms have the
indicated meanings:
"Aspen" means Aspen Technology, Inc.
"Securities Act" means the Securities Act of 1933, as amended.
"Exchanged Shares" means the 77,870 shares of Aspen Common exchanged for the
previously outstanding shares of common stock of Basil Joffe Associates, Inc.
"Aspen Common" means Aspen common stock, $.10 par value.
"Stockholder" means Dr. Basil Joffe.]
